TaxTMI 
TaxTMI 
2019 (11) TMI 1236
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....2005-06. 2. All the grounds of appeal are related to the addition made by the Assessing Officer (AO) u/s 40A(3) of the Income Tax Act, 1961 (in short 'Act'). In this case, assessment was completed originally u/s 143(3) by an order dated 25.09.2007. Subsequently, the assessment was taken up for revision u/s 263 by Commissioner of Income Tax, Rajahmundry and found that the assessee has debited the amount of Rs. 53.62 lakhs towards site purchases in the P&L account for purchase of 6.39 acres of land from several parties vide two agreements dated 28.05.2004 and 03.06.2004 as per the details given below : (i) Agreement dated 28.05.2004 Date Amount in Lakhs Mode of Payment 28.05.2004 4.0....
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....ections : "(i) To examine whether the land owners are really agriculturists and payments were made by the assessee in any villages where there are no banks or whether payments were made on holidays and whether there was any need for making cash payments. (ii) To bring on record the agreement, if any between the assessee firm and Sri G.V.K.Chowdary in the light of the contentions made in the reply to the show cause letter issued to the assessee to revise the Assessment Order passed by the AO for assessment year 2005-06. (iii) To examine the applicability or otherwise of the decision of the Hon'ble Tribunal, Chennai B Bench (Income Tax Officer Vs. Smt. N.Padma) to the facts of the assessee's case. (iv) To e....
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....ccasion the payment was made on a Bank holiday (i.e. on 04-7-2004, which was a Sunday) of Rs. 1.00 lakh and the Bank was not served on that day and also insisted the agent to make payment in cash. 2.3. The AO examined the explanation of the assessee and held that the entire payments were made to the land owners through agent is an afterthought and cannot be relied upon. The AO further viewed that since the endorsements were made on the reverse side of the agreement, the affidavit of Shri G.V.K.Chowdary is unreliable and against the facts. The contention of the assessee that the payments were not made to the landlords directly also is untenable. Therefore, the AO did not accept the contention of the assessee and further viewed that the de....
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....unal in the case of Sri K.Phani Kumar Vs. ACIT in I.T.A. No.300/Viz/2015 dated 30.11.2018 and argued that on similar facts, the Tribunal has deleted the addition made u/s 40A(3) of the Act. Therefore, argued that the assessee's case is squarely covered by the decision of this Tribunal, hence, requested to set aside the orders of the Ld.CIT(A) and allow the appeal of the assessee. 5. On the other hand, the Ld.DR supported the orders of the lower authorities. 6. We have heard both the parties and perused the material placed on record. In the instant case, the contention of the assessee is that the assessee has appointed Shri G.V.K.Chowdary as an agent for procurement of the land, since the assessee was not having sufficient knowledge wi....
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.... the affidavit, the AO has simply brushed aside the agreement without making any enquiry. The AO without examining either Shri G.V.K.Chowdary or the land owners has come to a conclusion that the documents were created to strengthen the assessee's case which is based on surmises without having any evidence. Any conclusion has to be drawn only after verification of the facts. The AO ought to have examined Shri G.V.K.Chowdary and the land owners to ascertain the fact regarding the payments, made directly or through the agent. The fact that the land owners were agriculturists and small farmers, insisted the cash payment was supported by the affidavits given by the land owners as seen from the assessment order. Therefore, we hold that there is n....